The Good, the Bad and the Ugly: SPG 2016 Category Changes

Plenty of blogs have already written posts on 2016 SPG category adjustments. As always, my goal is to apply this news to an average American family. While changes may not look bad on surface, I think this is a significant devaluation. You can see the full list here where you can sort it by country or state. You have till March 1st to book and lock in the old rate.

Imagine if another program has raised the price of many of its properties from 40,000 points to 70,000 points. There would be an outcry, right? But somehow, SPG manages to get away with this sort of thing year after year. What do I mean by that? Many hotels that are now a category 2, will be a category 3 soon. That means that the cost will go up from 4,000 points (3,000 on weekends) to 7,000 points per night. Let’s look at the “ugly” first:

Several popular properties in tourist areas will experience a major rate hike. After this adjustment, there will literally be no bargains near Disney. I wrote about Sheraton Lake Buena Vista resort before and mentioned that for 4,500 points on weekends, you can get a family suite with bunkbeds that fits up to 8 people.

This deal will be gone as of March 1st. I’ll be honest, I haven’t stayed at this place, no do I plan to lock in this redemption before it’s too late. The reason? Fees galore. There is a resort charge of $24, plus parking fee of $21 per night. Oh, and no free breakfast. No thanks. Still, it could be worth it in high season, so take a look at your upcoming plans.

Walt Disney Swan resort will soon cost between 14,000-16,000 points per night depending on the time of the year, and that’s just obscenely expensive IMHO. Unless you are redeeming points during holidays, you will be better off getting a condo or paying cash for a cheaper property. Note that Walt Disney Dolphin resort (sister property) will still cost a flat 10,000 points per night. But there is one significant problem: the rooms come with 2 double beds, and for my family it’s a deal breaker. Swan, on the other hand, has two queens.

The “bad”:

Well, not much to say here other than Maui will be totally out of reach for an average Joe who isn’t swimming in SPG points. Honestly, at 12,000-16,000 points per night, it wasn’t a spectacular bargain to begin with, other than during peak times. But now, at 20,000-25,000 SPG points per night? Forget about it. Go through VRBO or AirBnB and save your SPG points.

On to the “good”:

Ah, silver lining at last! If you are planning on heading to Canada, consider using SPG points. Lots of bargains to be had, and quite a few properties in popular destinations will now be a category 2. We are actually thinking about visiting Toronto area, as well Niagara Falls next summer, so I’m quite excited. If you are heading to the latter, check out Four Points by Sheraton Niagara Falls Fallsview which will soon cost 4,000 points per night, 3,000 on weekends. That’s very reasonable, considering the fact that rates here run at 200 CAD:

This is a terrific bargain, and if you have a large family, it could make sense to redeem points for two rooms as of March 1st. And at 6,000 SPG points on weekends, why not? Sell, sell, sell! I’ve written about our trip to Niagara Falls and mentioned that we had to stay on American side due to my parents’ visa issues. Honestly, it didn’t bother me one bit, but my husband said we are heading to Canada next time.

One morning we had to go by McDonald’s to get breakfast, and noticed that one car in the parking lot had bullet holes in it. The look on my husband’s face said it all, namely: “I think we are on the wrong side of the Falls.” Interestingly, the Four Points Niagara Falls located in US, is changing from category 2 to a category 3. Go figure! Honestly, whatever side you decide to stay at is up to you. Either way, I strongly recommend you visit this natural wonder. It’s not something you can appreciate by looking at photos. You truly have to be there to experience it.

Ways you can acquire SPG points

For a normal family, the only two reasonable options are signing up for SPG credit card bonus or collecting points via everyday spending. The latter is a slow and painful process, but could certainly makes sense for category 1 or 2 properties.

Signing up for SPG co-branded credit card is much quicker, but most hobbyists already got it in the past. Unfortunately, personal version will only let you collect the bonus once per lifetime. You can read about the card here Note that many have been able to get an offer of 30,000 points by creating a new account on SPG.com The rules are a bit different for a business version of Amex SPG, and I recently wrote a post on this very topic.

This card (business or personal version) is absolutely worth getting for the sign-up bonus. Whether you should renew it or not will depend on your circumstances (see my post here) Both cards pay me commission if you apply through my site.

Bottom line

While there are bright spots in this announcement (Canada! Oh, Canada!), overall, I would call it a significant devaluation of SPG program. Mileage transfer is becoming a much more attractive option, especially when there is an extra bonus, as was the case with AAdvantage over the last few summers. Of course, with Marriott takeover, it might not matter much in the long run.

So, make sure to book properties now in order to lock in the old rate. My policy with SPG points is to burn them when it makes sense. Due to how valuable they are, I try to hang on to them and use currency like IHG instead when it comes to hotels. That said, if we end up going to Canada as planned, I’m selling my SPG points in exchange for staying at category 2 properties. It’s an offer I can’t refuse.

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It’s my understanding that one of the primary factors for a hotel being in one of SPG’s categories is their standard room rate. Currencies outside the US, in general, are falling against the dollar. This is why you are seeing all the drops in Canada, their dollar is hovering near low points not seen for approximately 15 years ($200 CAD is about $145 USD). Just 5 years ago, the USD/CAD was nearer to 1:1. Because the US economy is doing well, the hotels have more demand and can therefore raise their standard rates. So that’s why you see the category increases in the US and other countries that use the USD or lock their exchange rate to the USD. It stinks, but I don’t see this as a devaluation of the program as much, it’s more of an economic adjustment. A devaluation would be something like all categories doubling in point price. It’s worth noting that SPG, like many other programs, you get the best value by staying 5 nights since you only pay for 4. The more important news is that SPG hasn’t done anything with their 20K->25K airline mile conversion deal.

BTW, if you have never been to Canada, now is the time to go because it is effectively on sale for 25-35% off due to the currency rate. It’s a beautiful country and driveable for many people. If you want a European feel, visit French-speaking Quebec City (one of the oldest settlements in N. America and a UNESCO World Heritage Site) and Montreal (check out old Montreal and the port area, Mont-Royal park, Notre Dame Basilica, and the culinary scene. If possible, go during the Jazz festival which is usually held during the first week of July).

Erik, you make some very good points (pun intended). I totally agree that exchange rate plays a huge part in this adjustment. I actually meant to mention it and just forgot. I’m definitely not complaining about Canada SPG properties! Nice timing since we are planning on going there and I think this new development just might seal the deal. I was hoping to burn my stash of SPG points on cat 1 or 2 properties because that’s where you get the most bang for your buck. I think using 3,000-4,000 points on a $145 room (or even a $100 room) is an amazing deal, no matter how you slice it.

The US situation, on the other hand, looks brutal IMO. I currently don’t see any property which would compel me to part with my super duper valuable SPG points. Add to that all the ridiculous resort fees, and mileage transfer seems like the way to go. I know what you are saying, and agree that this is simply due to high occupancy rates and stronger economy. Still, paying 7,000 points instead of 3,000 is a deal breaker for me. Well, unless I don’t have any other hotel points at the moment.

I actually have been to Canada a few times, but not to Toronto. I would LOVE to visit Quebec City, but it doesn’t look like it will happen this time around. We are planning on visiting New York state (New York city included), Toronto and Niagara Falls. There won’t be time left for Quebec, sadly… Maybe next time.